No, I’m not predicting he’s going to win the presidency next week. And no, I’m not guaranteeing that if he does win he will spark a worldwide financial panic either. But I do know that both things might happen. I know that they are bigger risks than most people realize. And I know that those risks are not currently reflected in the stock or bond markets.

And while there’s little point arguing with Trump’s tinfoil army, I should add: This is not about politics either. Sure, I’m a Never Trump, but that cuts no ice on the markets. This is only business.

The latest polls show Trump narrowing the gap sharply. The RealClearPolitics average shows him trailing Hillary Clinton by just two percentage points — within the margin of error. This follows Republican FBI director James Comey’s intervention in the campaign. Number-cruncher extraordinaire Nate Silver now gives Trump close to a 30% chance of winning — twice what it was two weeks ago.

The British stock market fell by almost 10% overnight following the Brexit shock in June. The pound crashed further. Stocks quickly rebounded, but the British currency has kept falling. And Brexit was small potatoes compared to a possible Trump victory. Great Britain’s small economy can be carried aloft on the currents of the world. The U.S. is not so lucky. The world’s entire financial system is ultimately backed by the U.S. economy, and our stocks, Treasury bonds, and currency. If we’re in trouble, everyone’s in trouble.

Investors need to put their own political views aside and look at things in a cold light.

Trump has spelled out few details for investors to digest. But he has promised to overturn 35 years of U.S. economic consensus and to roll back free trade agreements, restrict imports, and manipulate the U.S. dollar. He has also promised massive tax cuts and spending hikes. These are not polemical accusations: These are things he has said, and said repeatedly.

By definition, such things must affect stocks, bonds and currencies — big time. According to the U.S. Commerce Department, our annual trade just with China, Mexico, Japan and South Korea — the four overseas partners that a President Trump would be most likely to target — totaled $1.7 trillion last year. That’s equal to nearly 10% of the entire U.S. economy, and about $14,000 per household. That’s just with four countries. The uncertainties would spread far, far wider.

You simply can’t challenge or disrupt this amount of activity without causing turmoil. It’s not possible.

The stock market is only just waking up to these risks. And it hasn’t moved much. The S&P
SPX, -0.27%
s only 3% below the all-time record it hit in September. Various measures show U.S. stocks today are either slightly or very expensive by historic measures. In either case they do not reflect the risks of a shock. The U.S. dollar, too, is at lofty levels. This would be worrying enough even if we were confident about the election outcome.

If market prices were already reflecting the risks, there would be no point in selling out. But they aren’t.

Logically, you’d expect U.S. stocks to be vulnerable to a Trump shock for obvious reasons. You’d expect it of the dollar. And you’d also expect it of emerging markets: They depend heavily on trade with the U.S., and they are vulnerable to any global panic. Emerging markets such as China would be in the firing line of Trump’s trade policies.

Global investors might not be thrilled that the U.S. government has fallen into the hands of a junk-bond king with four corporate bankruptcies to his name.

Bonds are at risk too. Treasurys, traditionally the safe-haven asset, could easily get pummeled by a Trump victory. Global investors might not be thrilled that the U.S. government has fallen into the hands of a junk-bond king with four corporate bankruptcies to his name and massive, unfunded spending plans. For safety and a quiet life they might buy German bunds.

And if Treasury bonds fall, U.S. corporate bonds will too. (Mortgage rates would rise.)

Arguably, international or so-called “EAFE” stock funds (meaning Europe, Australasia and Far East), which invest in developed overseas markets, ought to be safer. If people worry about the U.S., they’d presumably look to Europe, Japan and Australia as alternatives. And as those stock markets are priced in their local currencies, they may also prove more resilient to a dollar slump.

As for gold: It’s the only currency no country controls. But its value is a riddle wrapped in an enigma. Caveat investor.

Once again, this is not about investment, speculation or trade. This is about insurance. If these things don’t happen — if Trump doesn’t win, or his victory doesn’t spark a panic — I’ve lost nothing but the cost of insurance. I’m comfortable with that. I don’t regret writing off my fire insurance premiums each year either.

The famous problem about “timing” the market is that you have to be right twice: You have to sell at the right time, and then buy back in at the right time. Anyone cutting back sharply on stocks and bonds before the election needs to give thought to the second half of the problem: Otherwise you could end up sitting on the sidelines endlessly, worrying about reinvesting.

Personally, if Hillary Clinton wins I’ll restore my original asset allocation immediately, regardless of how much of a bounce I may have missed. That’s not because I am necessarily bullish on her economic policies, but because I am agnostic.

On the other hand, if Trump wins it could change everything. I’ll look for a different allocation — and I will ease my way in slowly, over several months.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.